Tis The Season For Tax Identity Theft

“Identity Thief” is a 2013 movie starring Jason Bateman and Melissa McCarthy about a woman who steals the identity of a man named “Sandy.” After the McCarthy character steals the Bateman character’s identity, all types of high-jinx ensue.

In real life, identity fraud is a very serious matter that frequently ruins the credit of the victim and takes a great deal of time and effort to resolve. With the 2013 tax filing season starting on January 31, 2014, the season for tax identity fraud is also upon us.

Stolen identity refund fraud (SIRF) is a subset of identity theft that involves the criminal stealing the tax “identity” of an individual. Similar to any identity fraud, a criminal committing tax identity fraud obtains key information about the victim. In the tax context, the key is obtaining the individual’s name matched with his or her social security number. Once that is obtained, the SIRF thief submits a false tax return in the name of the victim claiming a tax refund. Unfortunately, in many instances the refunds are issued.

The fraud may be discovered when the unsuspecting victim files his or her own return and discovers that the IRS will not issue a refund because a return has already been filed under their social security number. It can be very difficult for the individual to get this straightened out with the IRS once the tax identity theft has been committed. Like other identity theft, tax identity theft frequently causes the victim a number of problems including damaging credit ratings, and reducing state or federal benefits.

The victims of tax identity fraud are frequently the elderly, or individuals collecting subsistence payments who are not required to file federal income tax returns. For the elderly and those who are not required to file tax returns, it may take much longer for such individuals to discover that they were victims of tax identity fraud. Nevertheless, the fraud may impact those individuals by reducing state or federal benefits.

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